RP’s GDP forecast up to 6.2 percent per ADB

The Asian Development Bank (ADB) forecasts Philippine growth to 6.2 percent coming from influx of remittances from overseas Filipino workers which will boost the growing domestic consumption, increased investments and strong export growth.

In an ADB news released through their publication today said the higher-than-expected 7.9 percent expansion in gross domestic product in the first half ensures the country will post a solid growth for the rest of the year, a 1.2 percent higher than their earlier forecast of 5 percent growth in 2010.

With forecasted growth, ADP expects an inflation to average at 4.5 percent this year and 4.4 percent in 2011.

According to ADB report, the Philippine government needs to strengthen its tax administration given that President Aquino has promised that he won’t raise or issue new taxes.

"The country needs to increase its revenue collection in order to support social and development spending, which have lagged for many years," ADB’s Director for Philippines Neeraj Jain said.

The ADB added that the government has to invest in infrastructure and improve governance to attract more investments, create jobs and cut the 30 percent poverty incidence in this developing Southeast Asian country.

"All growth usually translates to poverty reduction," Jain said. But the challenge is to make sure that such growth will benefit the poor.

The ADB said that the downside risks to the Philippines’ 2010-2011growth forecast include uncertainty over the strength and pace of the global economic recovery and the La Niña-induced floods that can damage farm production.

Noted in the 2nd quarter report, the Philippine economy grew by 7.9 percent in the second quarter this year as compared to 1.2 percent growth in the second quarter of 2009, National Statistical Coordination Board (NSCB) Chief Romulo Virola said Thursday. It’s the widest quarterly growth since the second quarter of 2007. This growth, as measured by the gross domestic product (GDP) is attributed to peaceful elections, improved investor confidence, and global recovery.

GDP is the amount of goods and services produced within the country, estimated at $160.6 billion in 2009.